POWER May 2010 - 67

POWER IN MEXICO
Interview with Estéfano Conde,
CFE Communications Director
Q. Can you please give us a brief background
of the structure and role of the
Comisión Federal de Electricidad (CFE)?
A. CFE is a state-owned company headed by
a chairman who is the secretary of the Board
of Energy. There is a board which is headed
by a director and who is appointed by the
president. The current director has been
serving for 10 years. CFE is a completely
integrated company, and our duties include
generation, transmission, and distribution.
Q. What are the challenges of having to
supply electricity to everyone, regardless
of profit viability?
A. This is a great challenge; it is one of the
reasons why being state operated is important
for us. The government is committed
to supply electricity to every place. Thus
the question of profitability becomes less
of a priority. The government has to realize
the social commitments that it makes
with the people. At present our coverage
of electricity is 98%, which is among
the highest in the world. We have around
50,000 megawatts of installed capacity,
and we are very close to 26 million users,
which includes residential, commercial,
agricultural, and industrial. At present, we
have about 80,000 employees. Our net annual
sales are close to $20 billion.
We have a pretty well diversified installed
capacity, which ensures security in
terms of continuous supply. Our geography
and natural resources have enabled us to
generate electricity from diverse sources,
including hydro plants (which account for
20%), natural gas (which accounts for 30%
of our total electricity generation), coal
(which generates 10% of the total electricity),
and nuclear (which accounts for 2%),
wind, geothermal, and the rest is from fuel
oil. But day by day, we are moving away
from reliance on hydrocarbons because of
the environmental constraints and costs.
Despite being a monopoly, we encourage
competition inside the company
between various divisions that leads to
more efficiency.
within the Mexican energy mix. Mexico's
unique structure means that the CFE has an
obligation to obtain energy from the cheapest
source, and as renewables are in an incipient
state of development and therefore expensive,
this obligation makes it difficult for the
May 2010 | POWER
Q. What future do you see for renewable
energy in Mexico?
A. The president is completely convinced
about the importance of renewable energy,
and his administration plans to reach
the 25% of total energy target to be produced
from renewables by the end of his
term. This will include large hydropower
plants. Right now we are working on wind
energy in the south of the country.
Q. How are you going to resolve the dilemma
of your commitment to provide
cheap energy and at the same time
working on producing energy from renewables,
which may not be able to
compete on price?
A. Natural gas is cheap and clean, this
is true. Certain challenges are associated
with renewables. For example, if there is
no wind, there is no wind energy. Renewables
can work as complementary to other
sources. Unfortunately, they do not have
the full capacity to supply the energy on
a baseload basis.
Q. How is the demand for electricity in
the country evolving, and how you see
it in the future?
A. Generally, you add 1.5% to the annual
GDP growth rate, and that is our growth.
For example, if the economy grows 3%, we
need to grow 4.5%. In the last two years
the growth was very slow, but before that
our growth was around 6% annually. Year
by year, we incorporate around one million
new clients.
Q. Can you tell us about the challenges
for the future in the CFE?
A. Energy security is the main challenge.
We need to ensure a steady supply of the
fuels that we need to generate for the future
is available. Gas is going to be the
main source that we will rely on. We know
that the supply of gas has not been adequate
from PEMEX; 50% of our gas is
supplied by PEMEX, 30% we acquire from
the gas pipeline from the U.S., and about
20% from our LNG [liquefied natural gas]
facilities.
IPPs to develop such projects and leaves the
CFE itself little reason to encourage them. ■
-Written and researched by Clotilde
Bonetto (clotilde@gbreports.com) and
Mark Storry (mark@gbreports.com) of
Global Business Reports.
www.powermag.com
67
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POWER May 2010

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